What Statistics Don't Tell

August 17, 1981

IN RECENT YEARS, people in this country have apparently learned to live with a combination of high unemployment and declining purchasing power that, as recently as 1975, would have been considered intolerable for more than a short time. With unemployment now hovering in the 7 percent to 7.5 per cent range--and officially projected to go still higher --there is no apparent governmental concern and little reaction from the general public. Why?

One reason is that the averages in the official statistics describing earnings and unemployment hide much unevenness in the distribution of burdens. Unemployment, for example, tends to be concentrated among certain groups--teen-agers, blacks and, to a declining extent, women. Although prime working-age men were the big job losers in the last year or so, most of these losses were confined to the industrial Midwest while large sections of the country prospered. This doesn't mean that the losses of recent years didn't hurt; they just translated less easily into national concerns.

The measure of average purchasing power may also be misleading. Official statistics drawn from industry payroll figures portray an "average" worker who has steadily lost ground to inflation over the last decade. Average weekly payroll per worker, for example, declined almost 6 percent in purchasing power between 1967 and 1980. Does this mean that the average American family is now 6 percent worse off than in 1967? Not at all. The average worker in the payroll data isn't typical. He's a composite of full and part-time workers, married people and singles, young, middle-aged and semi-retired. He is also decreasingly likely to be the sole supporter of a family.

If instead you study the actual experience of families and individuals of a particular type--as the Bureau of Labor Statistics has done in a recently inaugurated series of reports--you will find that the average family hasn't done badly at all. Husbands in families, for example, earned 7 percent more in 1980 than in 1967, even after accounting for inflation. Most families did still better than that by adding more earners to their number--almost half of all families with working members now have two or more. While the average payroll worker is now taking home only $247 a week, the average family is earning $422, and those with more than one earner make $557--a far rosier picture.

The emergence of the multiple-earner family also explains why families, at least, are now better able to adjust to unemployment. Fully two-thirds of families with unemployed members--including those with only one member--still have other workers. Their earnings, moreover, average $300 a week --a far better cushion than the unemployment benefits that average only $100 a week and are received by only half of the unemployed.

This is not to say that unemployment and lagging wages are no longer serious problems. There is a natural limit to the number of workers that families can send into the marketplace. A family with both parents--or the sole parent--working, and a child or two with an after-school job, has made sacrifices that are not measured in income numbers. Unemployment of the long durations now being experienced by a third of the jobless is especially destructive to communities, workers and families. Understanding what lies behind the statistics that measure these social and economic problems is, however, a necessary first step toward sensible steps to deal with them.